I can't think of many things that would change the global economy more than finding out that we're not alone in the universe.

Other intelligent species out in the cosmos may have advanced technology to share with us — which would obviously be a potentially huge economic stimulus here on Earth. Or perhaps they'd want to wage war against us and wipe us out. But even if there are hostile species out there, it is better that we know about them as early as possible so we have a better chance to make massive investments to try to defend ourselves.

Funding for large, open-ended projects like the hunt for alien life has been difficult to secure in the past. Such initiatives don't promise any immediate return or immediate industrial applications for investors. So funding is mostly limited to those who hope to see the initiative succeed for nonfinancial reasons.

But now, investors concerned or excited about the possibility of discovering alien life may soon have the option of purchasing a hedge against it.

In an article for the Journal of the British Interplanetary Society, Jacob Haqq-Misra of the Blue Marble Space Institute of Science has an idea for a new way to fund research. Business Insider reports:

He proposes a bond which pays out when extraterrestrial life is proved to exist by researchers on earth. It would be a "lottery bond," which is a security usually issued to fund projects when the issuer foresees low demand for the bonds. In order to drum up demand, some randomly selected bonds within the issue are redeemed at a higher value than the face value of the bond once the project is completed; this enhances the value of the bond.

All of the bonds get a regular, but low coupon payment, and once the project is completed, the holders of the "lucky" bonds get a high payout, while everyone else gets less or nothing. [Business Insider]

I propose the establishment of a SETI Lottery Bond to provide a continued source of funding for the search for extraterrestrial intelligence (SETI). The SETI Lottery Bond is a ﬁxed rate perpetual bond with a lottery at maturity, where maturity occurs only upon discovery and conﬁrmation of extraterrestrial intelligent life. Investors in the SETI Lottery Bond purchase shares that yield a ﬁxed rate of interest that continues indeﬁnitely until SETI succeeds — at which point a random subset of shares will be awarded a prize from a lottery pool. SETI Lottery Bond shares also are transferable, so that investors can benefact their shares to kin or trade them in secondary markets. The total capital raised this way will provide a fund to be managed by a ﬁnancial institution, with annual payments from this fund to support SETI research, pay investor interest, and contribute to the lottery fund. Such a plan could generate several to tens of millions of dollars for SETI research each year, which would help to revitalize and expand facilities such as the Allen Telescope Array. [arxiv]

A world in which scientists can appeal directly to an increasingly scientifically literate public for funds instead of having to rely on approval by government or industry would be a much brighter one. It would allow funding for a huge range of projects, not just initiatives with applications (e.g., military applications) desired by government and industry.

And if that leads to the discovery of alien life, all the better.

Editor's note: This article has been revised since it was first published in order to more clearly include proper attribution to source material.